Update On United’s Controversial Quarterly Employee Bonuses

At the beginning of March, United announced that they would be eliminating quarterly bonuses for their employees, which were up to $300 per quarter when United met their goals.

They planned to replace this with a lottery system that includes quarterly prize drawings, ranging “from $2,000 to $40,000, luxury cars, vacation packages, and a grand of prize of $100,000 awarded to one eligible employee per quarter.” This drawing would happen each quarter as long as United reached at least one of their performance goals.

This was clearly a cost saving measure on United’s part, when you consider that they have 88,000 employees. United’s president spun this change as a positive, suggesting that this was an “exciting new rewards program,” and a United spokesperson said that they believed this “new program will build excitement and a sense of accomplishment as we continue to set all-time operational records that result in an experience that our customers value.”

United employees were livid, partly because they were having a consistent bonus taken away, and partly because management was trying to spin this as a positive. Given how viral the story went, after less than a week United realized that they had no choice but to backtrack. United said that they’d maintain the same program for the first quarter of 2018, as they took some time to “reconsider the program and gather additional input.” They said that they’d have a lot of listening sessions across the system. I’m not sure what they were expecting to hear there, other than “don’t change the program.”

The first quarter is now up, and there’s an update on this situation.

The Chicago Business Journal quotes a memo sent yesterday by United’s VP of Human Resources and Labor Relations, Kate Gebo, telling employees that United won’t make any changes to their existing quarterly operational incentives program for the remainder of 2018.

The decision to keep the current program comes after more than 50 listening sessions around United’s network, with Gebo calling the feedback “thoughtful, honest and passionate.” She says that one of the themes that emerged is that “when it comes to operational performance, you want to be rewarded as a team for what is truly a team accomplishment.”

While this program is safe for 2018, it looks like United might still try to make changes to it in 2019, as they say “looking forward to 2019 and beyond, our goal is to ensure that you feel truly valued for your contributions to United’s ongoing success.” United will provide an update on what a new program will look like before the end of the year. Hopefully they’re a bit more careful next time, both with how they share the message, and the content of it.

Comments

  1. If the proposed program is so amazing then the executives should have their bonuses and stock allocated in the same way.

  2. Ben you may want to verify for yourself but I believe United has officially announced the date of their next Polaris lounge opening April 30th at SFO. I read this but wanted to ensure I wasn’t reading something wrong. Cheers!

  3. Yeah, how about we replace corporate HQ salaries with a prize drawing? Maybe the leadership team should do even the most basic of smell tests before they pull stupid stuff like this?

  4. Just my opinion..get rid of these kinds of xxxx..reinvent UA properly, even if it means from the ground up as a whole. Such management needs to be chopped ASAP!

  5. @Anon – You had me at “executive bonuses be replaced”

    As some know, I am STUCK like an inmate with UA in the OFCA (Occupied Former Continental Area) vicinity of IAH. You can see the writing on the wall, that “sand-boy” errr……, I mean Oscar (I am just repositioning the sand) Munoz is practically on his way out the door and the destroyer of airlines, aka Gordon Gekko (Bluestar anyone? Spot on @RF!) is salivating at taking the helm, and will make Smisek wind up being missed. While I sincerely wish I had options (I do for international but for domestic its pretty much UA or air-on/stay-on for using anyone else to get anywhere in a realistic timeframe since everyone else share the tiny Terminal A with very poor routes (even wrote the only other option I have as an Alaska MVP75 for 1 specific case begging them to open up more routes than just to SEA).

    Really sad to see this spiral of dead-airline flying. 🙁

  6. “looking forward to 2019 and beyond, our goal is to ensure that you feel truly valued for your contributions to United’s ongoing success.”

    I take this to mean: In 2019 changes are coming, and Scott Kirby thinks employees will like them

  7. Quick note from a “professional” journalist: You should get to the news quicker. Three paragraphs of summary and background before getting to the point is pretty lame. Offer what’s new, then go into the background.

  8. @James:

    I presume they held Town Halls at all the hubs and several focus cities. Probably multiple Town Halls at each cite. In all, it likely totaled 50+ listening sessions. But I’m with ya; seems like a change this drastic should’ve been run by multiple focus groups before being released into the wild.

  9. Having worked in another large organization (not an airline), I cringe (and become very suspicious) when I hear things from management like “listening session,” “employee-driven,” or any of the other clichés from management consultants.

  10. @Jeff, 100% agreed. For that reason I always skip to the bolded section a few paragraphs after the beginning because Lucky’s style is always to rehash what’s been said already. I think he likes to do that because it makes his articles longer. Half of it is old news and half of it is recent news.

  11. I’d expect any passive aggressive service that occurred as a result of this to continue now that United has kicked the can to 2019. Scott Kirby is terrible for this airline, will continue to avoid.

  12. @Jeff – as a professional journalist; you should know this is a blog. If you didn’t know that, that’s on you and says a lot about your journalism..

  13. So a similar, albeit shittier version, of this program will be rolled out next year.

    For the employees, one of the biggest issues is that once you sign with an airline, you’re generally stuck. You could be the most senior captain on the largest aircraft in the fleet, but if you move to another airline, you’re going to be dead last on the seniority list. Lowest pay, worst schedules. Which airline will be the best to work for in 10, 20, or 30 years? Will your airline still be around?

  14. I truly hate flying United and it’s because of the horrible attitude of the horrible FAs.

    I just flew SEA-AMS in Delta One and while the 767 seats leave a lot to be desired, it’s all made up for by the wonderful Delta employees.

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